TRI-COUNTY FINANCIAL CORPORATION
                1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS


     1. PURPOSE OF THE PLAN.

     The purpose of this Tri-County Financial Corporation 1995 Stock Option Plan
for  Non-Employee  Directors  (the  "Plan") is to advance the  interests  of the
Company through  providing  Directors of the Company and its Affiliates with the
opportunity to acquire Shares. By encouraging such stock ownership,  the Company
seeks to  attract,  retain,  and  motivate  the  best  available  personnel  for
positions of substantial  responsibility and to provide additional  incentive to
Directors to promote the success of the business.

     2. DEFINITIONS.

     As used herein, the following definitions shall apply.

     (a)  "Affiliate"  shall  mean  any  "parent   corporation"  or  "subsidiary
corporation"  of the  Company,  as such terms are defined in Section  424(e) and
(f), respectively, of the Code.

     (b) "Agreement"  shall mean a written  agreement entered into in accordance
with Paragraph 5(c).

     (c) "Board" shall mean the Board of Directors of the Company.

     (d)  "Change in  Control"  shall  mean the  acquisition  of the  beneficial
ownership  (as that  term is  defined  in Rule  13d-3 of the  General  Rules and
Regulations  under the  Securities  Exchange Act of 1934,  as amended) of 25% or
more of the voting  securities of the Company by any person or by persons acting
as a "group" (within the meaning of Section 13(d) of the Securities Exchange Act
of 1934). For purposes of this subparagraph only, the term "person" refers to an
individual or a corporation,  partnership,  trust,  association,  joint venture,
pool, syndicate, sole proprietorship,  unincorporated  organization or any other
form of entity not specifically  listed herein.  The decision of the Board as to
whether a change in control has occurred shall be conclusive and binding.

     (e) "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (f) "Common  Stock" shall mean the common stock,  par value $.01 per share,
of the Company.

     (g) "Company" shall mean Tri-County Financial Corporation.

     (h)  "Continuous  Service"  shall mean the absence of any  interruption  or
termination of service as a Director of the Company or an Affiliate.  Continuous
Service shall not be considered  interrupted in the case of sick leave, military
leave or any other  leave of absence  approved  by the Company or in the case of
transfers  between payroll  locations of the Company or between the Company,  an
Affiliate or a successor.

     (i)  "Director"  shall  mean any  member  of the  Board or of the  Board of
Directors of an Affiliate, including advisory director Gough.

     (j) "Effective Date" shall mean the date specified in Paragraph 13 hereof.

     (k) "Employee"  shall mean any person  employed on a full-time basis by the
Company or an Affiliate.

     (l)  "Exercise  Price" shall mean the price per Optioned  Share at which an
Option may be exercised.

     (m) "Market Value" shall mean the fair market value of the Common Stock, as
determined under Paragraph 7(b) hereof.

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     (n)  "Option"  means an option to  purchase  Common  Stock  which meets the
requirements set forth in the Plan. Such Options shall not constitute "incentive
stock options" within the meaning of Section 422 of the Code.

     (o)  "Optioned  Shares"  shall mean  Shares  subject  to an Option  granted
pursuant to this Plan.

     (p) "Participant"  shall mean any person who receives an Option pursuant to
the Plan.

     (q) "Plan"  shall mean this  Tri-County  Financial  Corporation  1995 Stock
Option Plan for Non-Employee Directors.

     (r) "Share" shall mean one share of Common Stock.

     3. TERM OF THE PLAN AND OPTIONS.

     (a) Term of the Plan.  The Plan shall continue in effect for a term of five
years from the Effective Date, unless sooner terminated pursuant to Paragraph 14
hereof.  No Option  shall be  granted  under the Plan  after five years from the
Effective Date.

     (b) Term of Options.  The term of each Option  granted under the Plan shall
be 10 years.

     4. SHARES SUBJECT TO THE PLAN.

     Except as otherwise  required by the provisions of Paragraph 10 hereof, the
aggregate  number of Shares  deliverable  pursuant  to Options  shall not exceed
7,000 Shares. Such Shares may either be authorized but unissued Shares or Shares
held in treasury. If Options should expire, become unexercisable or be forfeited
for any reason  without  having been  exercised  or become  vested in full,  the
Optioned Shares shall, unless the Plan shall have been terminated,  be available
for the grant of additional Options under the Plan.

     5. ADMINISTRATION OF THE PLAN.

     (a) General Rule.  The Plan shall be  administered  by the Board,  provided
that the Board may appoint a committee of  Directors to make any  determinations
required pursuant to the Plan.

     (b) Powers.  Except as limited by the express  provisions of the Plan,  the
Board shall have sole and complete authority and discretion (i) to determine the
form and  content of Options  to be issued in the form of  Agreements  under the
Plan,  (ii) to interpret the Plan,  (iii) to prescribe,  amend and rescind rules
and  regulations  relating  to the Plan,  and (iv) to make other  determinations
necessary or advisable for the administration of the Plan.

     (c)  Agreement.  Each  Option  shall be  evidenced  by a written  agreement
containing such provisions as may be approved by the Board.  Each such Agreement
shall constitute a binding contract between the Company and the Participant, and
every  Participant,  upon  acceptance of such  Agreement,  shall be bound by the
terms and restrictions of the Plan and of such Agreement. The terms of each such
Agreement shall be in accordance  with the Plan. In particular,  the Board shall
set forth in each Agreement (i) the Exercise Price of an Option, (ii) the number
of Shares subject to, and the expiration date of, the Option,  (iii) the manner,
time, and rate  (cumulative or otherwise) of exercise or vesting of such Option,
and (iv) the restrictions, if any, to be placed upon such Option, or upon Shares
which may be issued upon exercise of such Option.

     The  President of the Company and such  Directors as shall be designated by
the Board are hereby authorized to execute  Agreements on behalf of the Company,
and to cause them to be delivered to the recipients of Options.

     (d) Effect of the Board's  Decisions.  All  decisions,  determinations  and
interpretations  of the  Board  shall be final  and  conclusive  on all  persons
affected thereby.

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     (e) Indemnification. In addition to such other rights of indemnification as
they may have,  the members of the Board shall be  indemnified by the Company in
connection  with any claim,  action,  suit or proceeding  relating to any action
taken or  failure  to act under or in  connection  with the Plan or any  Option,
granted hereunder to the full extent provided for under the Company's  governing
instruments with respect to the indemnification of Directors.

     (f) Certain Mandatory Abstentions.  Notwithstanding  anything herein to the
contrary,  no Director shall have any vote with regard to any Option  previously
granted to himself or herself.

     6. GRANT OF OPTIONS.

     Each  Director  who is not an Employee  but is a Director on the  Effective
Date shall  receive,  on said date,  an Option to  purchase  1,400  Shares at an
Exercise Price per Share equal to its Market Value on the Effective Date.

     7. EXERCISE PRICE FOR OPTIONS.

     (a) General Rule. The Exercise  Price as to any particular  Option shall be
the Market Value of the Optioned  Shares on the date of grant,  as determined by
the Board.

     (b) Standards for Determining Exercise Price. If the Common Stock is listed
on a national  securities exchange (including the NASDAQ National Market System)
on the date in question, then the Market Value per Share shall be the average of
the highest and lowest  selling price on such exchange on such date, or if there
were no sales on such date,  then the  Exercise  Price shall be the mean between
the bid and asked price on such date.  If the Common  Stock is traded  otherwise
than on a national securities exchange on the date in question,  then the Market
Value per Share shall be the mean  between the bid and asked price on such date,
or,  if there is no bid and asked  price on such  date,  then on the next  prior
business day on which there was a bid and asked price.  If no such bid and asked
price is  available,  then the Market  Value per Share  shall be its fair market
value as determined by the Board, in its sole and absolute discretion.

     8. EXERCISE OF OPTIONS.

     (a) Generally.  Each Option shall be fully (100%)  exercisable  immediately
upon the date of its grant.

     (b) Procedure for Exercise. A Participant may exercise Options,  subject to
provisions relative to its termination and limitations on its exercise,  only by
(1) written  notice of intent to exercise the Option with respect to a specified
number  of  Shares,  and (2)  payment  to the  Company  (contemporaneously  with
delivery  of such  notice)  in cash,  in  Common  Stock  owned for more than six
months,  or a  combination  of cash and  Common  Stock  owned  for more than six
months,  of the  amount  of the  Exercise  Price for the  number of Shares  with
respect to which the  Option is then  being  exercised.  Each such  notice  (and
payment where required) shall be delivered,  or mailed by prepaid  registered or
certified  mail,  addressed  to the  Treasurer  of the Company at the  Company's
executive offices.  Common Stock owned for more than six months utilized in full
or partial  payment of the  Exercise  Price for  Options  shall be valued at its
Market Value at the date of exercise.

     A Director who exercises Options may satisfy all applicable federal,  state
and local income and  employment  tax  withholding  obligations,  in whole or in
part,  by  irrevocably  electing to have the Company  withhold  shares of Common
Stock, or to deliver to the Company shares of Common Stock that he already owns,
having a value equal to the amount  required to be  withheld.  The amount of the
withholding requirement shall be the applicable statutory minimum federal, state
or local income tax with respect to the award on the date that the amount of tax
is to be withheld.

     (c)  Exercisability.  Options granted under this Paragraph may be exercised
only while the  Participant  is a Director  of the  Company,  or within one year
after termination of the Participant's  Continuous Service as a Director, but in
no event later than the date on which such Options would  otherwise  expire.  In
the event of such Director's death during the term of his directorship,  Options
granted under this  Paragraph may be exercised  within one year from the date of
his death by the personal  representatives of his estate or person or persons to
whom his


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rights  under such  Option  shall have  passed by will or by laws of descent and
distribution,  but in no event later than the date on which such  Options  would
otherwise expire.

     9. CHANGE IN CONTROL

     At the time of a Change in  Control,  each  holder  of an  Option  shall be
entitled to receive  cash from the  Company in an amount  equal to the excess of
the Market  Value of the Common  Stock  subject to the Option over the  Exercise
Price of the Optioned Shares, in exchange for the cancellation of such Option.

     10. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.

     (a)  Recapitalizations;  Stock  Splits,  Etc. The number and kind of shares
reserved for issuance  under the Plan, and the number and kind of shares subject
to outstanding Options (and the Exercise Price thereof) shall be proportionately
adjusted  for any  increase,  decrease,  change  or  exchange  of  Shares  for a
different  number or kind of shares or other  securities  of the  Company  which
results  from  a  merger,   consolidation,   recapitalization,   reorganization,
reclassification,  stock dividend,  split-up,  combination of shares, or similar
event in which the number or kind of shares is changed  without  the  receipt or
payment of consideration by the Company.

     (b) Transactions in which the Company is Not the Surviving Entity.  Subject
to Paragraph 9 hereof, in the event of (i) the liquidation or dissolution of the
Company,  (ii) a  merger  or  consolidation  in  which  the  Company  is not the
surviving  entity,  or (iii) the sale or disposition of all or substantially all
of the  Company's  assets  (any of the  foregoing  to be referred to herein as a
"Transaction"),  all outstanding  Options shall be surrendered.  With respect to
each Option so surrendered,  the holder of the  surrendered  Option may elect to
receive --

                  (1) for each Share then subject to an  outstanding  Option the
         number and kind of shares into which each outstanding Share (other than
         Shares  held by  dissenting  stockholders)  is  changed  or  exchanged,
         together with an appropriate adjustment to the Exercise Price; or

                  (2)  a  cash  payment  (from  the  Company  or  the  successor
         corporation),  in an amount  equal to the  Market  Value of the  Shares
         subject to the Option on the date of the Transaction, less the Exercise
         Price of the Option.

     (c) Conditions and Restrictions on New, Additional,  or Different Shares or
Securities.  If, by reason of any adjustment made pursuant to this Paragraph,  a
Participant becomes entitled to new, additional, or different shares of stock or
securities,  such new,  additional,  or different  shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions  which were
applicable to the Shares pursuant to the Option before the adjustment was made.

     (d) Other Issuances.  Except as expressly  provided in this Paragraph,  the
issuance by the Company or an Affiliate  of shares of stock of any class,  or of
securities  convertible  into  Shares  or stock of  another  class,  for cash or
property or for labor or services  either upon direct sale or upon the  exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number,  class,  or Exercise  Price of Shares
then subject to Options or reserved for issuance under the Plan.

     11. NON-TRANSFERABILITY OF OPTIONS.

     Options may not be sold, pledged,  assigned,  hypothecated,  transferred or
disposed  of in any  manner  other  than by will or by the laws of  descent  and
distribution.


     12. TIME OF GRANTING OPTIONS.

     The date of grant of an  Option  shall,  for all  purposes,  be the date on
which the Board makes the  determination  granting  such  Option.  Notice of the
determination shall be given to each Participant to whom an Option is so granted
within a reasonable time after the date of such grant.


<PAGE>

     13. EFFECTIVE DATE.

     The Plan shall become effective immediately upon its approval by the Board.

     14. AMENDMENT AND TERMINATION OF THE PLAN.

     The  Board may from  time to time  amend  the  terms of the Plan and,  with
respect to any Shares at the time not subject to Options,  suspend or  terminate
the Plan;  provided that no provision hereof may be amended more than once every
six  months  (other  than to comport  with  changes  in the Code,  the  Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder). No
amendment,  suspension or termination of the Plan shall,  without the consent of
any  affected  holders of an Option,  alter or impair any rights or  obligations
under any Option theretofore granted.

     15. CONDITIONS UPON ISSUANCE OF SHARES.

     (a) Compliance  with Securities  Laws.  Shares of Common Stock shall not be
issued  with  respect to any Option  unless the  issuance  and  delivery of such
Shares shall  comply with all relevant  provisions  of law,  including,  without
limitation,  the Securities Act of 1933, as amended,  the rules and  regulations
promulgated   thereunder,   any  applicable   state   securities  law,  and  the
requirements of any stock exchange upon which the Shares may then be listed.

     (b) Special Circumstances.  The inability of the Company to obtain approval
from any  regulatory  body or authority  deemed by the  Company's  counsel to be
necessary to the lawful issuance and sale of any Shares  hereunder shall relieve
the  Company of any  liability  in respect of the  non-issuance  or sale of such
Shares. As a condition to the exercise of an Option, the Company may require the
person exercising the Option to make such  representations and warranties as may
be necessary to assure the  availability  of an exemption from the  registration
requirements of federal or state securities law.

     16. RESERVATION OF SHARES.

     The Company, during the term of the Plan, will reserve and keep available a
number of Shares sufficient to satisfy the requirements of the Plan.

     17. WITHHOLDING TAX.

     The Company's  obligation to deliver  Shares upon exercise of Options shall
be subject to the Participant's  satisfaction of all applicable  federal,  state
and local income and employment tax withholding  obligations.  Each  Participant
may satisfy the obligation, in whole or in part, by irrevocably electing to have
the Company withhold Shares, or to deliver to the Company Shares that he already
owns,  having a value equal to the amount required to be withheld.  The value of
Shares to be withheld, or delivered to the Company, shall be based on the Market
Value of the  Shares  on the  date the  amount  of tax to be  withheld  is to be
determined. As an alternative, the Company may retain, or sell without notice, a
number of such Shares sufficient to cover the amount required to be withheld.

     18. NO EMPLOYMENT OR OTHER RIGHTS.

     In no event shall a Director's  eligibility to participate or participation
in the Plan  create or be deemed to create any legal or  equitable  right of the
Director,  or any  other  party to  continue  service  with the  Company  or any
Affiliate.  No  Director  shall have a right to be granted an Option or,  having
received an Option, the right to again be granted an Option. However, a Director
who has been  granted  an Option  may,  if  otherwise  eligible,  be  granted an
additional Option or Options.

     19. GOVERNING LAW.

     The Plan shall be governed by and construed in accordance  with the laws of
the State of Maryland,  except to the extent that federal law shall be deemed to
apply.